Carrier Abuses

We have reported before about issues with carrier abuse in CA.

Now it seems that trouble is brewing in other states, with other carriers as well.

Three subsidiaries of a Milwaukee-based insurance holding company have agreed to restitution and a corrective action plan after the state determined that medical claims were wrongfully denied, state Insurance Commissioner Susan Cogswell announced Thursday.

Wrongful denial of claims.

Cogswell said the agency reviewed more than 500 claims, focusing on claim denials for pre-existing conditions, and found that Assurant failed to comply with Connecticut's prompt pay laws, denied claims on the basis of pre-existing conditions only to have those determinations overturned on appeal, and delayed investigations into denials for pre-existing conditions.

Suspected pre-ex claims are always a thorny issue for carriers. Sometimes the issue is clear cut once doctor notes are secured. Example.

Coverage effective 4/1/07. No medical issues listed on the application. Insured visits doc on 4/5 and complains about back pain.

Doc - How long have you had this problem?

Patient - About 2 months.

Doc - What have you done about the pain?

Patient - I bought a health insurance policy.

Sometimes not.

Coverage effective 4/1/07. No medical issues on the application. Insured visits doc on 4/5 for routine check up. Exam includes palpation of the abdomen. Doc notices some rigidity and tenderness.

Doc - How long have you had this problem?

Patient - What problem?

Doc - Rigidity & tenderness in your abdomen.

Patient - I haven't noticed any problem.

Situation one is easy to review & suspect fraud on the application. Situation two is a bit more challenging for the carrier.